One of the key factors contributing to this market growth is the
increase in smart card deployment. The Smart Card market in China has
also been witnessing the increase in emerging applications for smart
cards. However, the high cost of upgradation of compatible POS terminals
could pose a challenge to the growth of this market.

Commenting on the report, an analyst from TechNavio's Hardware team
said: ''Although there are few international vendors in the Smart Card
market in China, there has been a trend of a number of local players
entering the field for the manufacture of smart cards. The production
capacity of these smaller companies is very small in comparison to that
of the top players in the market; however, these smaller companies do
not have smart cards as their only product offering. Many of these
companies manufacture standard plastic cards such as ID cards, loyalty
cards and tickets.''

According to the report, one of the major smart card projects in China
is the government ID project. There have also been efforts from the
government regarding the employment of dual interface cards. The dual
interface cards are able to serve as a national ID card as well as a
payment card. Currently, the replacement of first-generation resident ID
cards with second-generation ID cards is taking place. Other ongoing
projects in the country include the Europay, MasterCard and Visa (EMV)
migration project, student ID cards, all-in-one campus cards, urban
transport cards, and cards for the Ministry of Labor and Social
Security. The market will also witness smart card deployment in other
areas during the forecast period. This increase in the number of
projects pertaining to smart cards will foster growth in the market.

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